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Deutsche BÃ¶rse has toughened its Dax admission rules to prevent companies that do not conduct the majority of their business in Germany from being included in its stock indices, as Frankfurt increasingly attracts listings from overseas.

A spokeswoman for exchange said: "The new rule is intended to ensure that companies that are included in the Dax indices reflect the German market. Other indices also do this. For example, the S&P 500 doesn't include companies that do not have a clear national character."

Rules on the admission to the Dax indices previously stated that an overseas company must either be headquartered in Germany or have more than 33% of its shares traded in Frankfurt as well as being headquartered in the EU in order to be considered for inclusion in the Dax indices.

The exchange will reveal which companies qualify for admission to the Dax, MDax, SDax and TecDax "selection" indices after it next reviews the market capitalisation and stock exchange turnover of listed companies on March 5. The changes will come into effect when the indices are rebalanced on March 25.

At the same time, Deutsche Börse will also launch a Dax International family of indices that will include domestic and foreign companies, irrespective of whether they meet the admission criteria for the "selection" indices.

The Deutsche Börse spokeswoman said: "With more international companies coming to Frankfurt, the exchange has decided to create a benchmark for international as well as national indices."

The Dax International 100 will include the most liquid national international stocks from the Prime Standard, which has the highest entry requirements, the General Standard, which is the next tier down, and the Entry Standard, the most basic level of admission.

Related

For inclusion in the DAX supersector indices, companies must be part of the Prime Standard and have an average daily exchange turnover of at least €1m. Similar sector indices are also being introduced for the small- and mid-cap companies.